BY FRANCINE KNOWLES BUSINESS REPORTER
December 19, 2000
Responding to complaints from union members in Chicago, the Labor Department asked the Washington-based Hotel Employees and Restaurant Employees Union International to hold a hearing to justify placing Chicago-based Local 1 under trusteeship more than a year ago.
Rank-and-file members of Local 1, a union with a history of problems and the subject of past investigations into alleged mob ties, are protesting the trusteeship, which they say is illegal.
They also question why some Local 1 officers remain on the payroll during the voluntary trusteeship, which international representatives said was put in place because of financial problems at the local.
The local represents 14,000 maids, bartenders waiters and waitresses at downtown Chicago hotels and restaurants.
"Without that hearing, [the trusteeship] is not considered valid," said Labor Department spokesman John Peterson, who noted a voluntary trusteeship--which is undertaken with the support of local leaders--is unusual.
Some critics charge the trusteeship, particularly absent a hearing, has left members in the dark, without a voice in local affairs, and stifled members' participation at a time the local was becoming more democratic.
"I think it has definitely hurt the membership," said Jim Michalik, who was defeated in a close election for president at the local in 1999--the first contested election at the local in 16 years. "It's hurt the democratic process that we had gotten started."
International General President John Wilhelm and the local's trustee, Henry Tamarin, say the trusteeship remains necessary because of continuing financial problems at the local. They argue that the local needs stronger footing before contract negotiations take place with major downtown hotels in 2002 and to aid the local in organizing 20 new hotels that have opened with non-union employees in the past few years.
Union members say while they resent financial mismanagement, they also oppose an open-ended trusteeship that they say has the international indefinitely calling the shots. They say locally elected leadership should be put in place quickly to correct the problems.
Tamarin said no date has been set for new elections, which would return the union to local control, and he wouldn't speculate on when that might occur. But a hearing on the trusteeship, open to the rank and file, will be scheduled after the holidays and take place in Chicago, he said.
The union has had a history of problems. Former International President Edward T. Hanley and his son, former Local 1 President Thomas Hanley, were forced out amid charges of misusing union dues to pay for ghost staff, luxury automobiles and a $2.5 million jet for officers of the union, whose workers are among some of the lowest paid in the country.
A federal judge earlier this month ended five years of court oversight of the international union. That monitorship was designed to rid the union of corruption, and settled a racketeering lawsuit brought by the federal government, which said the objectives of the monitorship have been substantially achieved.
Regarding Local 1, Tamarin said an audit conducted at the end of last year shortly after his arrival found that the local "was one step short of bankruptcy."
"There's no question there was financial mismanagement," Wilhelm said. But the mismanagement did not violate labor laws, and is insufficient to warrant terminating former officers, he contended. They remain on the payroll at Local 1, reassigned as business agents--some drawing salaries of around $70,000 annually.
Critics argue former leaders bear responsibility for the local's financial condition and should be fired.
"One of the greatest aspects of anger by the members is the fact that they have kept all these [former officers] on staff drawing salaries," said Pablo Garcia, who was part of Michalik's slate.
Tamarin said when the trusteeship began, debt at the local, which has a $4 million annual budget, totaled $1.2 million. Since then the local has paid off about $200,000, he said.
Salaries have been cut by 10 percent for former officers whose salaries exceeded $50,000 a year, and officers have been reassigned as business agents.
Business agents' pay ranged from above $40,000 annually to the upper $70,000 range before the wage cut.
Tamarin said he also implemented a dues increase in January of $1.30 per member per month that had previously been approved by delegates.
But that's also drawn criticism.
"Members are upset," said Michalik. "They don't feel they are getting their money's worth now."